IGL Working Paper No. 20/04

Subsidized R&D Collaboration: The Causal Effect of Innovation Vouchers on Innovation Performance

Marco Kleine, Jonas Heite and Laura Rosendahl Huber

December 2020

We study the causal effect of subsidized R&D collaboration on innovation performance of small and medium-sized enterprises (SMEs). In particular, we make use of a randomized controlled trial to analyze the effect of a nationwide innovation voucher scheme in the United Kingdom that grants SMEs across all industries financial support of up to 5,000 GBP for engaging the services of experts, e.g., from universities, research institutes or IP advisors, when pursuing an innovation-related project. Our results show that the innovation voucher program successfully promotes the execution of these innovation projects with positive short- and medium-term effects on product and service development, internal processes and intellectual property protection. Based on our results, we also provide some practical guidance to further improve the effectiveness of voucher programs.

Keywords: randomized controlled trial, industrial policy, SMEs, open innovation, collaboration subsidy, innovation performance